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Relationship marketing vs. transactional marketing for building customer loyalty

How is the relationship marketing school of thought different from the transaction school of thought? Are there deficiencies in the transaction concept that the relationship school has identified?

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Relationship marketing is all about creating longitudinal bonds with customers, which will produce stronger, long-term purchasing and word-of-mouth activity. This type of marketing will also increase referrals, price and service tolerance, plus a willingness to provide information and active inclusion of purchasers in product development.

Transactional marketing is all about delivering the rational, or functional, basic table-stakes components of value delivery. This type of marketing generates passive, transitory, and reactive relationships with the customer, and tends to be short-term in nature. Transactional marketing also tends to commoditize the value proposition.

This was first published in January 2007

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